First, the good news: The healthcare field is finally showing movement on diversifying governance composition. The Governance Institute’s Biennial Survey of Hospitals and Healthcare Systems is revealing improvement—63% of boards reported at least one member of color in 2023, and 62% did so in 2021, compared with 49% in 2019. Both the 2021 and 2023 surveys also demonstrated the addition of female board members and a decrease in average director age compared with past years. Although additional progress is needed, a shift is underway in many boardrooms.
Some boards have not anticipated that a changing governance composition may upend their dynamics and culture. The occupational, business or community connections of new board members may differ from those of long-standing directors. Tenured board members may be serving with newly appointed directors with whom they do not have past business or social relationships. Without careful stewardship, transitioning new and legacy directors together into an effective governance team may be choppier than expected
Boards have been intentional in recruiting new directors with diverse competencies and backgrounds; similarly, they must be intentional in ensuring that a more diverse board is fully inclusive of all members. The benefits of a diverse board will not be realized until all directors fully participate in boardroom discussions and decisions. The aim is to develop an environment that will engage the voices and talents of both experienced and newly appointed directors, resulting in sharpened governance effectiveness. CEOs are well positioned to help their boards anticipate the need for inclusive governance processes; advance planning will supersede problems that can occur when new and tenured board members do not meld well.
Governance Committee Role
Remember the primary purpose of governance diversification is to bring different perspectives into the board’s work. Boards with a history of quickly reaching consensus are sometimes surprised that the newest directors may express divergent opinions and priorities. Just as the governance committee oversees governance orientation, it can also take the lead in preparing the board for changes in board composition. Considerations for the governance committee’s preparatory work include the following:
- Openly acknowledge to the existing board that new directors may shift the boardroom discourse. Lead a discussion with the full board, noting that new voices may not reflect the opinions of more seasoned directors. Remind existing board members that new and differing perspectives are an indicator of a healthy, effective board.
- Objectively assess the board chair’s group facilitation skills. If not a strength of the chair, develop alternative strategies (perhaps asking another director or the CEO to lead key discussions alongside the board chair).
- Objectively assess the current boardroom culture. Are differing opinions routinely expressed in board and committee meetings? Do all directors participate in deliberations? If not, then consider both points as an opportunity for governance improvement. The board will fully benefit from diverse director composition with an established culture of active participation and respectful expression of viewpoints.
New directors also present an opportunity for the governance committee to rethink the board orientation program. Given the unique background and professional experiences of each new board member, a customized orientation plan (which will vary by individual director) is advised. Board orientation programs are typically focused on the business of healthcare and may overlook discussion about board culture. For example, new directors appreciate advance knowledge about:
- Board discussion protocols.
- Voting procedures.
- Seating arrangements.
- Cell phone usage.
- Level of formality (or informality) during board meetings.
- Attendance expectations at board-related social events.
Although many directors will pick up on the board’s unique culture over time, addressing cultural norms early is helpful to new directors and may accelerate inclusion. Matching an experienced director with each new director as a peer mentor also fosters inclusion.
Board Leadership
Reconfiguring board composition presents a leadership opportunity for the board chair. The chair can set the tone by actively supporting the governance committee’s work to prepare the current directors. Two ways to do this are by reinforcing that differing opinions and new ideas are expected and welcome, and by emphasizing that airing divergent viewpoints is a healthy dynamic. Boards are more likely to avoid a groupthink mentality when contrasting opinions are openly expressed.
A more diverse board will also test the meeting facilitation skills of the board chair. Although many newly appointed directors prefer to absorb the complexities of healthcare before contributing to discussions, the board chair can still seek opportunities to engage them during meetings. Fresh eyes can be an asset as boards tackle challenging and complex decisions, so inviting new members into the conversation can help. (Example: “Mary, you have a lot of expertise in this area. What is your perspective?”)
A board chair can be more effective when they build an open and positive relationship with each director over time. Scheduling an informal meeting with each new director, with the intent of building relationships and open communication, can help the chair achieve that.
Although virtual meetings have become the new normal for most boards, the virtual setting generally does not promote rapid integration and a sense of inclusion among new directors. In-person interactions with peer directors are essential for new board members. Consider strongly encouraging in-person attendance at board meetings whenever possible. An in-person retreat can also jump-start the development of a newly constituted board. With thoughtful planning, boards can create inclusive and highly effective governance that draws upon the unique skills and backgrounds of all their members.
Kimberly A. Russel, FACHE, is CEO of Russel Advisors, a healthcare governance and CEO consulting firm, and an adviser with The Governance Institute (russelmha@yahoo.com).
CEO Checklist to Facilitate Inclusive Governance
- Initiate conversation with the governance committee about preparing for board composition changes.
- Work with board leadership and the governance committee to develop strategies that promote full inclusivity.
- Join the board chair in acknowledging the positive changes that diverse board composition brings to the organization.
- Reach out to each new director personally and individually.